The announcement follows a comprehensive review of existing state regulations
and statutes in the wake of the meningitis outbreak linked to New England Compounding Center (NECC),
a now-defunct Massachusetts company, which allegedly distributed tainted steroid
injections to patients at clinics in four Michigan counties: Genesee,
Livingston, Macomb and Grand Traverse. Michigan patients were hit hardest by the
multi-state outbreak, with 264 infections and 19 deaths according to the most
recent official tallies recorded by the Centers for Disease Control and
Prevention and the Michigan Department of Community Health.

"This was a horrific
tragedy where Michigan citizens seeking pain relief left clinics with
devastating meningitis infections, or even worse, lost their lives," said
Schuette. "We owe it to the victims and their families to find answers, and to
do all we can to ensure a tragedy of this magnitude never happens again. This
legislation will hold accountable every compounding pharmacy operating in
Michigan and ensure these companies put patient safety before their bottom
line."

"This incident
was tragic," said Arwood. "Our department prioritizes new regulations based on
the immediate threat posed to the health and safety of Michigan citizens.
Clearly, this is an area that requires immediate attention to reduce the risk of
this ever happening again."

Proposed Legislation Follows Thorough State Review

Immediately
following the meningitis outbreak, Schuette and the Snyder Administration worked
together to conduct a thorough and complete review of the existing regulatory
and legal framework addressing compounding pharmacies operating in Michigan.
Following the review by experts from the Department of Licensing and Regulatory
Affairs, the Michigan Board of Pharmacy, and the Department of Attorney General,
it was determined that new legislation was needed to strengthen oversight of
compounding pharmacies and ensure patient safety.

Senator Joe Hune (R-Hamburg), who represents Livingston County, one
of the four Michigan counties hardest hit by the meningitis outbreak, plans to
work with Schuette and Arwood to introduce the legislation. The legislation is
anticipated to add the following four safeguards, among others, to Michigan law
governing pharmacies, and compounding pharmacies in particular:

Accountability at the Top: All
pharmacies must have a "Pharmacist-in-Charge" who is licensed and
responsible for ensuring the pharmacy follows state laws and
regulations.

Accurate Record-Keeping:
Compounding pharmacists must maintain a record for all sterile
compounded drug products detailing the product's name, strength
quantity and dosage, formula to compound, date of preparation,
identifying prescription number, manufacturer and lot number of each
ingredient, name of the person who prepared the compound, and the
name of the pharmacist who approved the compound.

Background Checks: Criminal
background checks will be required for pharmacy owners who are not
yet licensed, and for those licensed prior to October 1, 2008.

Regular and Robust Oversight:
Pharmacies, manufacturers and wholesalers engaged in compounding
will submit to regular inspections by state authorities at least
once during each two-year licensing cycle.

"I want to thank Attorney General Schuette for his
work to find justice for the victims of fungal meningitis in Michigan. The NECC
was reckless in their actions, and I find that pursuing legislation to
strengthen oversight over compounding pharmacies is the least we can do to
provide safeguards from this foolishness from happening in our state again,"
said Hune. "It is a necessary and imperative action to assure the safety of the
citizens of the great state of Michigan. Our citizens cannot afford to fall
victim to such ridiculous imprudence."

Immediate Action
Following the Meningitis Outbreak

On October 12, 2012,
following verified reports that NECC was responsible for the meningitis
outbreak, Schuette acted to suspend the company's pharmacy license in the state
of Michigan. In a formal Complaint and Order of Summary Suspension filed with
the Department of Licensing and Regulatory Affairs, Schuette alleged that NECC
acted as a "drug manufacturer" - not a compounding facility - by distributing
large amounts of medication to various hospitals and clinics in Michigan. The
company had only been licensed to fill individual prescriptions for Michigan
patients as a compounding facility. NECC's license was suspended and the
company was forced to cease operations in Michigan.

On December 12,
2012, the Michigan Board of Pharmacy Disciplinary Subcommittee formally agreed
to the license surrender, and NECC voluntarily surrendered their Michigan
pharmacy and controlled substance licenses. As a result, NECC can no longer do
business in the state of Michigan, and its surrender was reported as a
disciplinary surrender to other states. Because the order provides that the
surrender is based on a breach of Michigan's Public Health Code, the State of
Michigan can deny licensure to any individual who had a financial interest in
NECC and applies for a new pharmacy license in the future.

Michigan Impact
to Date

As of September 16,
2013, the Michigan Department of Community Health (MDCH) reports Michigan
citizens have been hardest hit, with 264 infections and 19 deaths. Three
additional deaths of Michigan residents who received treatment at an Indiana
clinic are listed in Indiana patient counts, due to the location where they
received the tainted treatments. The latest CDC reports can be viewed online:
http://www.cdc.gov/hai/outbreaks/meningitis-map.html.

On October 6, 2012, NECC issued a recall of all its products
currently in circulation that were produced and distributed from its facility in
Framingham, Massachusetts. More information about the recall, including a list
of affected medications can be found here:
http://www.neccrx.com.